Leadership Choices that Killed Our Recruiting

Every entrepreneur has two stories: the story they tell people and the real story. I find the real stories so much more interesting. Below is the real story on how we royally effed up our recruiting pipeline and what we are doing to fix it.

(This article was originally published by our Co-founder, David Steinberg, on LinkedIn.)

Scaling a business to 20, 60, 90 and now 160 employees presents unique challenges at each “scale level.” A strong recruiting pipeline is critically important to create a deep bench that can be tapped as opportunities exponentially grow. With the benefit of hindsight, I now realize I made significant mistakes in how we approached recruiting and set ourselves up to scale. We are fixing them, but it has come with a cost.

I am running the risk of having my email blowup with recruiters, but I figured I’d be transparent about the decisions that got us here and what lessons I’ve learned for the future.

#1 – Counting on Success to Scale

Adpearance has grown fast for a few years now, from 30 to 80 to 160 employees in three years’ time. And for years we put off hiring an internal recruiter.

Our problems: We had a really good picker. My co-founder, Aaron James, can glance at a stack of resumes and identify the best candidates in seconds. He’ll phone screen a candidate within minutes of receiving their application, and he has great instincts for fit. Aaron’s ability to filter + DMC—our training and in-house recruiting program of Digital Marketing Coordinators—got us by for a long time. And we let it go too long.

We were so confident in our ability to scale recruiting that we managed to recruit and hire with no HR and no internal recruiter until we were at 75 employees. We were hiring and onboarding four new people a month with no systems, software, or coordination. That was a bad idea, and I don’t recommend doing that. We lost a few good employees because we were not prepared for them on day one.

Additionally, being a non-venture backed company, we’ve always intensely managed our banking relationships. The main covenant of our banking relationship has usually been tied to profitability. As we invested heavily in our own R&D, an easy lever to pull to keep us safe with our bank was to delay key hires an extra three weeks and often longer. This would win the battle but lose the war as we would consume resources in the interview, hiring and project planning but then delay, often losing key hires or project steam.

To solve these problems, we have worked to free up time and resources of our internal recruiters and created better (but always improving) systems to have internal visibility of the upcoming R&D priorities. Additionally, we differentiated between internal “scaling tools” vs “external products.” While this may sound simple, it removed the pressure of our scaling tools (such as many of the systems we use for ad management) to also become a “product” and focused our teams solely on their core customer–ourselves. Solving this internal riddle created clarity around our development hires and made us more confident in knowing when to pull the trigger.

#2 – The Twofer

Culturally, the easiest hires to move through the process quickly became the “twofers.” People that we could sell ourselves on under the guise that they would fill multiple roles.

We would add a position, and because we got by without it for years, we couldn’t imagine it being a full-time job and would add in a second full-time job.

Designer and Google AdWords specialist – one person.

Developer and SEO – one person.

Recruiter and receptionist—one person.

I could keep going on the real pairings we’ve attempted over the years, but you get it.

We’ve killed “the twofer” hire named a phone room in our new space, “The Twofer” as a reminder to not repeat history.

#3 – A Marketing Double Standard

Adpearance is a marketing and sales intelligence company. Last I checked, we were the sixth largest tech company in Portland. And until last year, we didn’t have a single internal marketer on staff. We spent almost no time getting our name out in the local community and never networked. Our client base is not in Portland, and I am personally uncomfortable with some of the self-promotion that is part and parcel of running a mid-sized, public-facing business.

Well, I know you’re shocked hearing this from me, but apparently, marketing is important. Without awareness, it’s really hard to recruit. You have to invest in telling your story to get the best talent, especially in a tight hiring market like Portland.

Today, our marketing team is five people strong. It was a hard investment to make because there was so much “deferred maintenance” on our own brand and marketing it felt like it would be awhile before we saw returns. They are humming now, and I don’t know how we ever got by without them.

#4 – The Office

We moved into a beautiful new office a few weeks ago, and it’s helped me see how truly terrible our old space was. And more importantly for recruiting, how long it had been since we cared about our physical presence.

Watching our employees relish the new space, I totally agree with people who say that your office environment is one of your most important employee benefits. If you have a crummy office, it’s on par with paying under market value as a recruiting hurdle. If you’ve reached a point where you don’t care about your space, you need to relocate fast or your recruiting pipeline will feel it.

#5 – Simply Expecting Employee Referrals

Some of our best employees were referrals from existing employees. And until last week, I never did anything to encourage more of that. Years ago, Moz (at the time SEO Moz) offered $12,000 referral bonuses, and it really pissed me off. For one, I felt it was so much money that it could cause people to behave unethically and, second, it over-emphasized the developer over the other hires, such as project and product managers, who really keep the lights on. We’ve put in place a very modest referral program that applies to ALL referrals no matter what position they enter the company at. I’ll let you know how it goes.

Looking towards the future of recruiting at Adpearance

As we right the ship and shore up the blocking-and-tackling of getting our pipeline solid again, I’m really excited to move to the next step, focus on hiring, and put out some bizarre Adpearance recruiting videos to play at the edges of our brand. Stay tuned.